Inner Mongolia draws large methanol investment

XIAN, Shaanxi (ICIS news)--China’s Inner Mongolia is drawing large methanol investments geared for methanol-to-olefins (MTO) projects with its cheap and abundant coal supply, industry sources said late on Thursday.

Nearly 10 m tonnes/year of methanol would be produced in the province in the next four to five years as several plants were under construction, the sources said on the sidelines of the Chemease methanol and derivatives conference.

The first phase of the project was likely to be completed in end of 2008, said Dai Bingxin, director of business and foreign affairs at Datang.

Of the 1.7m tonnes/year of methanol, around 1.5m tonnes will be converted to propylene using Lurgi’s technology, he said. The propylene will be used to make around 500,000 tonnes of polypropylene (PP), he added.

The project will use coal gasification technology from Shell, Dai said.

The cost of polypropylene made from this route is expected to be cost competitive, given the low price of coal in Inner Mongolia, he added.

However, since this is one of the first few MTO projects to be commercialised, there were still technical issues to be sorted from time to time in the construction phase, he said.

Around 3 tonnes of methanol are needed to produce 1 tonne of propylene in this process.